How to invest in abroad in stock market?

How to invest in overseas markets?

 Why to invest in foreign stock?

Every Indian is fan of foreign company and using the services in daily life routine everyday. We are making social circle using Facebook, We are searching on Google. We are shopping on Amazon etc.

Business model of the all above companies is successful and its going to be remain valid further also.

If you want to get benefited from the growth of these companies then you always try to invest in the foreign companies also time to time. Because Sensex doubled in the last 10 years, the well-known Amazon, which has become part of our everyday lives, rewarded shareholders with gains of 21 times. Apple Inc., another well-known company in India, rewarded shareholders with gains of close to eight times. There are many other well known names like Facebook, Google, Microsoft, Starbucks, Nike and Walt Disney, among others, which have beaten the Sensex hands down in this period.

How to select the Foreign company to invest:-

 Market capitalization should be more than $10 billion.

1. Returns on equity should be more than 15 per cent.
2. Debt-equity ratio should be less than one.
3. Revenue growth rate should be more than 5 per cent.

How to buy foreign Stock ?

Indians are allowed to invest $250,000 annually as per the current norms of the RBI. But mostly don’t know how.

Methods:-

1. ICICI Direct provides the facility to invest overseas through its arrangement with Saxo Bank of

Denmark. However, this is more of a client referral programme and ICICI Direct’s role is quite limited. ICICI Direct completes your formalities in India and then you become a client of Saxo Bank. After that,

you have to deal directly with Saxo Bank.

2. A good option for Indian investors who want to invest abroad is Interactive Brokers. It is a US-based company that provides trading facility in multiple markets. IB is even registered on the NSE as a broker and has its office in Mumbai. You have to fill the online application form at interactivebrokers.com. Your account gets active in about seven to 15 days.

What about the charges?

Saxo Bank has a slab rate for trading in various markets. Interactive Brokers charges flat $1 for US trades. Its charges (including taxes) vary for the other markets. It also has a monthly minimum of $10. That means

even if you don’t transact in a particular month, you will still have to pay $10.

Popular Name of the Foreign Stock :-

1. Adobe Systme
2. Amazon
3. Facebook
4. Pepsi
5. Apple
6. Google
7. Micorsoft
8. Nike
9. Starbuck
10. Visa
11. Walt Disney

Source : Value Research. To know more about these stock follow the July edition of Wealth Insight.